A large number of ERC-20 tokens have been affected by the bear market in 2018 specifically after the Initial Coin Offering (ICO) craziness. Investors were purchasing all sorts of ERC-20 coins that ended up disappearing.
According to the cryptocurrency analyst Ceteris Paribus, the ETH vs ERC-20’s 1-year returns show that 30 ERC-20 tokens outperformed ETH’s by 30%, 43 provided returns between 0 and -50% while 107 returned between -50% and -100%.
Ethereum Eclypsing ERC-20 Tokens
The data shown by Ceteris Paribus shows that the entire market has been very hard for smaller cap coins in comparison to larger players such as Bitcoin (BTC), Ethereum or Litecoin (LTC), among others.
$ETH vs ERC 20’s: 1 Year Returns
— Ceteris Paribus (@ceterispar1bus) May 3, 2020
Some of the cryptocurrencies that registered gains against Ethereum include SNX, DAG, LINK, HYN and LEND. However, Ceteris Paribus explains that the current analysis makes reference to one-year measurements. Indeed, the next 12 months are expected to be different for these assets and their relationship with Ethereum.
Furthermore, Ceteris Paribus stated that there will always be tokens that will outperform Ethereum in the cryptocurrency market. There are usually great digital assets that are built on top of the Ethereum network and that show great results over long periods of time.
Ethereum is currently the second-largest blockchain network in the market after Bitcoin. It has a price per ETH of $200 and a market valuation of $22.20 billion. That represents almost 10% of the entire cryptocurrency market valuation. That means that ETH has a market valuation as large as the combined market cap of XRP, Bitcoin Cash (BCH), Bitcoin SV (BSV) and Litecoin (LTC).
In addition to it, ERC-20 tokens tend to have low and limited liquidity in most of the cryptocurrency exchanges around the world. This shows that there are algorithms that may certainly affect the price of these digital assets more than in large-liquidity cryptocurrencies such as ETH.
Now, the Bitcoin halving is getting closer. In just 8 days, the upcoming halving will be reducing the rewards for Bitcoin from 12.5 BTC to 6.25 BTC and it is expected to have a positive effect on the BTC price over the long term. If that happens, many cryptocurrencies, including altcoins such as ERC-20 tokens, could start moving higher. Nonetheless, it will be interesting to see whether they are able to surpass ETH’s growth over time.